Aston Martin, the iconic British luxury carmaker, has announced plans to raise £210 million to bolster its electrification efforts and address financial challenges. The move comes in the wake of its second profit warning in as many months, with the company revising its annual profit forecast downward due to production and delivery delays.
Aston Martin now expects to post profits of up to £280 million for 2024, down from £305.9 million last year. The shortfall is largely attributed to delays in delivering half of its new Valiant supercars, which are now expected to reach customers in early 2025 instead of late 2024. These cars, priced at up to £2 million each, represent a significant portion of the company’s revenue.
In addition, the company has faced production issues and a slowdown in demand in China, with plans to produce 1,000 fewer cars this year due to late-arriving components. Shares in Aston Martin fell to a two-year low of 98.1p on Wednesday, closing slightly higher at 102p.
The planned £210 million fundraising will be split between £110 million from new shares and £100 million in new debt. The company confirmed that strategic investors, including the Yew Tree Consortium led by U.S. billionaire Lawrence Stroll, have already committed to buying £73.5 million worth of shares.
CEO Adrian Hallmark emphasized the importance of the funding for Aston Martin’s £2 billion electrification strategy over the next five years. "The financing we are undertaking supports our growth and provides the investment to continue with future product innovation," Hallmark stated.
Aston Martin’s struggles reflect broader challenges facing the automotive sector, including economic pressures, the transition to electric vehicles (EVs), and rising competition from Chinese manufacturers. Other major carmakers have also taken drastic measures:
These challenges highlight the tension between ambitious CO2 reduction goals and consumer demand for electrified vehicles.
Despite current hurdles, Hallmark remains optimistic about Aston Martin's future. He pointed to ongoing efforts to balance production and delivery schedules, manage costs, and enhance operational efficiency. “These efforts will deliver enhanced operational and financial performance in 2025 and beyond,” he said.
With its electrification strategy and continued focus on innovation, Aston Martin aims to secure its place in an evolving automotive landscape while maintaining its luxury brand legacy. However, the success of its fundraising efforts and strategic initiatives will be crucial in navigating the competitive and economic headwinds ahead.
